A look at the typical earnings season (for stocks)

Let's have a look at the typical earnings season.

We divide the year in four quarters like: January-March,  April-June, July-September and October-December. For the sake of simplicity we assume all four quarters are equal (they probably are not equal, but let's anyway assume it.) Next we look at each week for that quarter and count the number of S&P 500 companies, which are filing their quarterly or annual reports in that week. (We focus on the S&P 500 to keep things simple again.) If we plot that analysis in a nice chart we get something like this...

Typical earnings season: number of S&P 500 company filings per week

So what does it tell us?

Well, first of all there is a big peak and that peak happens to start in the third week of the quarter and lasts about 4 weeks. That means that more than 80% of the S&P 500 companies are filing their earnings results in these four weeks. For the remainig weeks there is only a small number of companies, which are reporting their financial results. So the action happens in a relatively short period of time. For the four quarters of the year this would be:

• Second half of January until first half of February
• Second half of April until first half of May
• Second half of July until first half of August
• Second half of October until first half of November

What's next?

In the next posts we plan to have a closer look at "the typical" earnings season and write some interesting things about industry sectors, sub-industries and more...